Asset and Financial Position of Bayer AG

Bayer AG Summary Statements of Financial Position according to the German Commercial Code

 

 

Dec. 31, 2016

 

Dec. 31, 2017

 

 

€ million

 

€ million

2016 figures restated

ASSETS

 

 

 

 

Noncurrent assets

 

 

 

 

Intangible assets, property, plant and equipment

 

58

 

152

Financial assets

 

49,112

 

47,071

 

 

49,170

 

47,223

Current assets

 

 

 

 

Inventories

 

3

 

2,109

Trade accounts receivable

 

77

 

2,002

Receivables from subsidiaries

 

4,092

 

2,585

Other assets and deferred charges

 

776

 

901

Cash and cash equivalents, marketable securities

 

2,728

 

4,272

 

 

7,676

 

11,869

Total assets

 

56,846

 

59,092

EQUITY AND LIABILITIES

 

 

 

 

Equity

 

16,565

 

18,875

Provisions

 

1,905

 

2,201

Other liabilities

 

 

 

 

Bonds and notes, liabilities to banks

 

6,673

 

7,618

Trade accounts payable

 

86

 

1,750

Payables to subsidiaries

 

31,197

 

28,078

Remaining liabilities and deferred income

 

420

 

570

 

 

38,376

 

38,016

Total equity and liabilities

 

56,846

 

59,092

Total assets increased due to the integration of the Pharmaceuticals and Crop Science businesses

The asset and liability structure of Bayer AG is dominated by the management functions for the Bayer Group, even following the integration of the parent company functions of the Pharmaceuticals and Crop Science divisions. The financial position is shaped particularly by the management of subsidiaries and the financing of corporate activities. This is primarily reflected in the high level of investments in affiliated companies and of the receivables from, and payables to, Group companies.

Total Assets
€ billion

Total Assets (bar chart)

Total assets of Bayer AG rose by €2.2 billion in 2017 to €59.1 billion, due particularly to the assumption of the operational business of the Pharmaceuticals and Crop Science divisions from Bayer Pharma AG and Bayer CropScience AG, respectively, which led especially to an increase in current assets of €4.2 billion. Noncurrent assets declined by €1.9 billion.

The decline in noncurrent assets resulted almost exclusively from the divestment of shares in Covestro AG (€1.9 billion) and their placement into Bayer Pension Trust e.V. (€0.2 billion), respectively. Investments in affiliated companies declined by €2.0 billion overall, but continued to account for by far the largest item in total assets, amounting to €46.2 billion or 78.2% (2016: 84.9%). The value of other financial assets and property, plant and equipment remained unchanged at €0.9 billion and €29 million, respectively, while intangible assets increased by €0.1 billion to €123 million.

Due to the transfer and integration of the Pharmaceuticals and Crop Science businesses, substantial inventories and customer receivables of €2.1 billion (2016: €0.0 billion) and €2.0 billion (2016: €0.1 billion), respectively, were recognized for the first time in current assets. The latter mainly comprised €1.6 billion (2016: €0.1 billion) from subsidiaries. Receivables from subsidiaries amounted to €2.6 billion (2016: €4.1 billion) and accounted for 4.4% of total assets. The other receivables reflected in current assets (including deferred charges) increased by €125 million to €901 million; this total includes €284 million in shares of Covestro AG divested to banks while retaining exposure to economic risks and opportunities. Cash and cash equivalents in the form of higher bank deposits increased by €1.5 billion to €4.3 billion.

Bayer AG had equity of €18.9 billion (2016: €16.6 billion). The increase represents the excess of the €4,543 million net income for 2017 over the €2,233 million dividend payment for 2016. The equity ratio increased to 31.9% (2016: 29.1%) due to the less substantial growth in total assets.

Provisions increased by €0.3 billion to €2.2 billion. Among the items transferred to Bayer AG in connection with the assumption of the operational business of Pharmaceuticals and Crop Science and the corresponding transfers of undertaking were pension obligations of €1.0 billion and fund assets of €0.4 billion, as well as net defined benefit liability of €0.6 billion. Nevertheless, pension obligations declined by €162 million due to the increase in the value of fund assets and additional contributions. Provisions for taxes also decreased, falling by €150 million to €391 million, while miscellaneous provisions rose by €608 million to €1,075 million. The main factors here were a €319 million increase in personnel commitments, which was attributable particularly to the increase in the size of the workforce, and a €220 million increase in impending losses, especially from hedging transactions.

Other liabilities (including deferred income) edged back by €0.4 billion to €38.0 billion (net of deductible receivables). Due to the assumed Pharmaceuticals and Crop Science businesses, significant trade accounts payable of €1.8 billion accumulated for the first time, while other operating liabilities declined by €1.7 billion. Financial debt was paid down by €0.5 billion, with a €1.5 billion decline in intra-Group debt being partly offset by a €1.0 billion increase in external financial debt. A €750 million Debt Issuance Program (DIP) DIP is a documentation platform that has enabled Bayer to flexibly issue notes in various currencies and with different maturities. bond maturing in 2018 was early redeemed in 2017, while €1 billion in debt instruments (exchangeable bonds) that can also be paid in Covestro shares were newly issued. Liabilities to banks and other third parties increased by €0.7 billion and €0.1 billion, respectively. Total financial debt at year end 2017 was €36.0 billion (2016: €36.5 billion). After deduction of cash and cash equivalents of €4.3 billion (2016: €2.7 billion), net debt fell by €2.1 billion to €31.7 billion (2016: €33.8 billion).

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